| Chapter 1: | Objectives, methodology, approach and definition of terms |
This supply-side view is countered by the customer-centric approach, which assumes that a Supply Chain consists of all necessary stages that are – directly or indirectly – involved in fulfilling a customer requisition. In this specific case, the focus is upon the transportation businesses, warehouses, dealers and the customers in question.36 The combination of both approaches leads to a superior definition, whereby the Supply Chain is seen as an agreement between companies in order to provide the market with products and services.37
Furthermore, this comprehensive point of view can be raised to a global level and placed in the context of a global association of organizations. In this sense a Supply Chain represents a global network of organizations, working together to improve the flow of material and information between supplier and customer. The operational objectives are the lowest possible cost and the highest possible speed. The ultimate objective is the satisfaction of customer needs. The information flow runs, as it were, forward-facing (i.e., from customer to supplier); the material flow, on the other hand, runs backward-facing (i.e., from supplier to customer). Furthermore, information flows from customers to dealers, manufacturers, logistic services and raw material suppliers. Material flows from raw material suppliers or component suppliers to customers. The common trait of both the material and information flows is that the process amongst the Supply Chain partners should be coordinated, and this also implies that some degree of forward and backward coordination isrequired.38
To take this line of thought further, the approach can also be differentiated from the supply and demand aspect. A Supply Chain has the purpose of transferring products and services from the suppliers up to the consumer (for example organizations, stores, individual people). The actions within the Supply Chain change depending upon the product and type of demand, but it is possible to identify a number of generally valid value-creating processes as follows:39